Political donations 'saw failed builder win govt contracts'

HOUSING and Public Works Minister Mick de Brenni has rejected LNP accusations in State Parliament that central Queensland building company JM Kelly secured government contracts because it was a significant Labor Party donor.

And he has rejected allegations proper process was not followed in the appointment of a former Housing and Public Works minister, Rob Schwarten, to the board of Queensland's building regulator.

JM Kelly Builders was placed in voluntary administration last week with debts of more than $18 million, just over two years after JM Kelly Project Builders went into liquidation with debts topping $30m.

Twenty-one government contracts held by JM Kelly Project Builders were transferred by the government to JM Kelly Builders in 2016, despite John Murphy having been both general manager of the old company and director of the new entity.

Member for Ninderry Dan Purdie asked the Mr de Brenni to explain why that had occurred despite serious concerns about Mr Murphy's director's building licence issued by the Queensland Building and Construction Commission.

At the time the contracts were novated, the regulator had started action to exclude Mr Murphy as a person of influence in the contruction industry.

The action ultimately failed on October 9 this year after Mr Mr Murphy's successful appeal to the Queensland Civil and Administrative Tribunal.

Following the recent collapse of JM Kelly Builders the regulator has started fresh action to remove him under tightened legislation.

Mr de Brenni turned the attack back on the LNP blaming it for changes to laws which he said had made it easier for companies that were failing.

He accused former Newman Government housing minister and current Deputy Opposition leader Tim Mander of being "entirely responsible for watering down minimum financial requirements and introducing self-reporting, which put literally thousands of Queensland small business subcontractors at risk".

"He changed the laws so that licensed contractors did not have to provide financial information to the Queensland Building and Construction Commission," Mr de Brenni said.

"The member for Everton made the commission blind to the financial circumstances of construction companies like JM Kelly and then it tied its arms behind its back so it could not investigate them. He also removed the requirement for larger licensed contractors to submit audited financial statements every year. The member for Everton described this as streamlining red tape. Small business subcontractors in this state call it negligence."

Mr de Brenni outlined how Labor's Queensland Building Plan, reached in agreement with the construction industry, was "methodically and progressively restoring confidence in the industry" through a range of measures including a new set of minimum financial requirements.

What went unanswered was why the Labor government had transferred 21 contracts to a company whose director the regulator was trying to exclude from the industry.

In response to questions from Burleigh MP Michael Hart about whether the proper cabinet handbook appointment process was followed for Mr Schwarten's QBCC board appointment or whether he was "a last minute walk-in to cabinet after lobbying by the Labor president", Mr de Brenni said all appointments went through the formal processes of cabinet.

"Every single appointment made by the Palaszczuk government has followed those practices," he said.

Left unanswered this week has been whether the government, given its roles as client and regulator would make good losses incurred by small business subcontractors who now face ruin after supplying material and labour to infrastructure projects but had not been paid.

The Subcontractors Alliance wants a Queensland Police investigation into the accuracy of statutory declarations signed by JM Kelly that those small businesses had been paid to the terms of their contracts.

The declarations were required ahead of progress payments from government departments.